The next big challenge for the nation's health care law may be sticker shock, when consumers find they're still paying high medical bills after buying low-cost insurance for the first time.
With a Dec. 23 deadline looming for anyone who wants health insurance by Jan. 1, people may hurry to choose plans with cheap monthly payments on a new insurance marketplace. But they may be surprised, especially if they've never had coverage before, to find they're still on the hook for thousands of dollars in out-of-pocket "deductibles," a standard part of most insurance policies.
Many will find they must pay costs up to $6,350 -- on top of their monthly premiums -- before their insurance pays anything for actual medical care. If they have a family, they may have to pay nearly $13,000 in an out-of-pocket "deductible" before insurance starts paying.
If you don't know about deductibles, you're not alone. Only 14 percent of American adults with insurance understand deductibles and other key concepts of insurance plans, according to a study published this year in the Journal of Health Economics.
If people with insurance don't understand it, it's likely that uninsured Americans' grasp is even fuzzier. If they make poor decisions when shopping for insurance for the first time, they may be surprised that the law's promise of affordable care, for them, is still out of reach.
About 1.8 million Illinoisans are uninsured, about 14 percent of the total population, according to estimates based on Census data. Under President Barack Obama's new law, almost everyone is required to get insurance or face a fee on their federal income taxes if they aren't covered by March 2014.
The new marketplace is where people can shop for insurance plans by tiers -- bronze, silver, gold and platinum -- based on what portion of medical costs are covered. Bronze plans are expected to be popular because they tend to have lower monthly premiums.
In Illinois, those plans will have deductibles ranging from $3,150 to $6,350, according to an analysis conducted for The Associated Press by Chicago-based Stonegate Advisors, an independent health care consulting company.
Adrienne Matzen, 29, is a Chicago actor who's been mostly uninsured since she turned 21. Her day job as a copyright permissions researcher doesn't provide insurance. She's generally healthy, but her thyroid condition and asthma require regular testing and medication. She plans to shop for insurance on the federal website and intends to look for a low monthly premium, even if it means a high deductible.
"I am so deeply clueless about all of this," she admits. "I'm hoping to talk to someone who could really clarify it all. There's been so much political yelling about it."
On the marketplace, she has an overwhelming choice of 71 different health plans, with monthly premiums ranging from $23 to $291 after a tax credit because of her income. Buying the cheapest plan would leave her with a deductible of $6,000. Instead, if she chooses a plan with a higher premium, she could find a deductible as low as $500.
Premium prices vary by region because of differences in what people spend on health care and the prices that hospitals and other providers can negotiate with insurers.
If Matzen stays healthy, she's better off with the $23 per month plan. One costly trip to the hospital, though, and the lower deductible looks smarter.
"People need to look in the mirror and think about what they value most," said Michael Wolf, director of the health literacy and learning program at Northwestern University's Feinberg School of Medicine in Chicago. Some will choose peace of mind and not having to worry about big medical bills, he said. Others will want to keep their monthly costs low.
Lynn Quincy, a senior policy analyst for Consumers Union, said consumers dread shopping for insurance. "They're sure there are gotchas in the policies and they think they're not going to be able to find them," Quincy said.
The health law requires insurers to provide consumers a standardized summary of benefits, written in plain language, with examples of what the policy pays for and what it doesn't.
With more people insured and choosing high-deductible plans, hospitals are more worried they'll get left with bills that patients can't afford to pay. In Chicago, Loyola University Health System is gearing up in two ways: offering payment plans with interest, and estimating costs so payment terms are settled in advance of a planned procedure.
In the eastern Illinois community of Paris, 58-year-old Starla Redmon purchased a health plan for $75 a month after her tax credit, the cheapest she could find. She's been uninsured four years after being laid off at a factory.
When asked about the deductible in her health plan, she said she didn't remember the amount. "I'm hoping I won't have to use it," she said.
After the government improved the problematic federal HealthCare.gov website, she spent less than an hour shopping for a plan and enrolling. An enrollment counselor told her to take her time and decide later, but Redmon said she wanted to do it quickly.
"No sense in waiting," Redmon said. "I said, `Let's just get her done."'